Some people I talk to want to know if they should have their credit “re-aged” before trying to get pre-approved for a mortgage. That is mainly because late fees cause issues when you apply for a mortgage to purchase a home. So what does it mean to get your credit “re-aged?” “Re-aged” is something your creditors can do to your past due credit card accounts to zap them back to currently due and it raises your credit score…sort of. So for example, if you’re three months late on your credit card payments then the creditor can agree to “re-age” your account and those three months will be erased. Those missed payments are forgiven and you no longer incur late fees. However, it also erases your credit for those accounts back to zero years. So if you “re-age” a credit card account that you have had for ten years, you could actually lower your credit score. On the other hand, it will erase those three months of late payments that also hinder your credit. So you really have to get good advice from a sharp lender before you ask anyone to “re-age” your accounts. When an account is “re-aged” you still owe the creditor the same amount of money, but you stop incurring additional late fees and you’re no longer delinquent on the account. It’s like getting a fresh start, but the down side is you could potentially hinder your credit score while trying to help it.
So the next question is “How do you get a creditor to ‘re-age’ an account?” To be considered for “re-aging” you have to demonstrate a renewed willingness and ability to pay, the credit card should be atleast nine months old, and you should have made atleast three consecutive minimum payments. There are limits on the number of times an account can be “re-aged.” A creditor may only do it once in a 12-month period and twice in a five year period for open-ending accounts. “Re-aging” an account is not a requirement, it is a nice gesture your creditor may do for you. The guidelines for doing such a thing to one’s credit are set up by the Federal Financial Institutions-Examinations Council and is outlined in it’s Uniform Retail Credit Classification and Management Policy.
At Register Real Estate Advisors we offer an in-house lender for our customers to help them get pre-approved for a mortgage. Please contact our office today to see if Terry Traylor, our in-house lender, recommends your credit be “re-aged” so that you can qualify to buy a new home while interest rates are at all time lows. We have Realtors standing by to show you houses! 281.288.3500.